Friday, February 10, 2017

General Cable Reports Fourth Quarter 2016 Results

HIGHLAND
HEIGHTS, Ky.-- (BUSINESS WIRE /ME NewsWire)-- General Cable Corporation (NYSE:
BGC) reported today results for the fourth quarter ended December 31,
2016. For the quarter, reported diluted loss per share was $2.10 and reported
operating loss was $97 million. The Company generated adjusted earnings per
share for the quarter of $0.05 and adjusted operating income of $27 million.
See page 3 of this press release for the reconciliation of reported to adjusted
results and related disclosures.

Michael
T. McDonnell, President and Chief Executive Officer, said, “In 2016 we achieved
significant progress in the execution of our strategic roadmap designed to
transform the Company into a more focused, efficient and innovative
organization, including the strengthening of the General Cable global
management team. We are especially pleased with what we have accomplished in
North America, which has been a primary focus of the roadmap during the first
year of our three year plan. In 2017, we expect to complete most of the North
American initiatives and make substantial progress in Europe and Latin America.
Fourth quarter results were at the low end of our expectations as stronger than
expected results in North America driven by demand for construction and
electric utility products were more than offset by a continued weak economic
environment in Latin America and a delayed implementation of a restructuring
project in Europe. We also delivered significant operating cash flow in the
fourth quarter of $89 million through timely customer collections and continued
tight management of inventory levels. We maintain a positive outlook for 2017
and are encouraged by our performance and continued execution as we head into
the year.”

Fourth
Quarter Summary

Reported
operating loss of $97 million largely due to settlement of FCPA-related
investigation and the reclassification of accumulated other comprehensive
non-cash currency translation expense of $28 million related to the
closure of our South African facilities

Adjusted
operating income of $27 million benefitted from strong performance in
North America and favorable metal prices which nearly offset lower subsea
turnkey project activity compared to last year and continued weak economic
conditions in Latin America

Generated
operating cash flow of $89 million driven by the continued tight
management of working capital

Maintained
significant liquidity with $399 million of availability on the Company’s
asset based credit facility and applied cash proceeds from divestitures to
reduce outstanding borrowings

Impact of
metal prices was a $5 million benefit compared to a negative $8 million
impact in the prior year period

Segment
Demand

North
America –
Unit volume was up 10% year over year as stronger demand for construction and
electric utility cables more than offset the continuing weak demand for
industrial and specialty products tied to oil and gas end markets.

Europe – Unit volume was up 6% year
over year driven by demand for electric utility products including land-based
turnkey projects as well as energy cables.

Latin
America –
Unit volume was up 9% year over year primarily driven by rod products.
Excluding rod products, unit volume was flat year over year.

Overall,
for the full year 2016, North America end market demand was up 1%. Demand in
electric utility distribution and non-residential construction markets in North
America was up year over year while demand for industrial and specialty
products tied to oil and gas markets continued to weaken throughout the year
and was down year over year 4% and 52%, respectively. In Europe, end market
demand was flat year over year. Latin America (excluding Venezuela) end market
demand was up 2% driven by rod products and shipments of aerial transmission
cables, while the balance of the portfolio remains under pressure due to
reduced spending on electric infrastructure and construction projects. Excluding
rod products, unit volume was down 4% year over year in Latin America.

Net
Debt

At
the end of the fourth quarter 2016 and the end of the fourth quarter of 2015,
total debt was $939 million and $1,080 million, respectively, and cash and cash
equivalents were $101 million and $112 million, respectively. The decrease in
net debt was principally due to cash proceeds from divestitures being used to
reduce outstanding borrowings and the efficient management of working capital,
including tight management of inventory levels.

Other
Matters

We
announced on December 29, 2016, that we had entered into agreements with the
SEC and the DOJ that bring to a conclusion those agencies’ respective
investigations relating to the FCPA and to the SEC’s separate accounting investigation
related to our financial statements from fiscal years 2012 and prior. As a
result, fines, disgorgement, and pre-judgment interest will be paid to the SEC
and DOJ in the amount of $82.3 million in 2017. We recorded a charge of
approximately $49.3 million in the fourth quarter of 2016.

As
previously disclosed, the minority shareholders in the Company’s business in
Colombia (Procables) elected to exercise a contractual right to sell their 40%
interest to the Company. In the fourth quarter of 2016, the Company paid $18.0
million to the minority shareholders for their 40% interest and now owns 100%
of the business.

First
Quarter 2017 Outlook

Revenues
in the first quarter are expected to be in the range of $850 to $900 million.
Unit volume is anticipated to be up low-single digits year over year. Reported
operating income is anticipated to be in the range of $15 to $30 million and
adjusted operating income is anticipated to be in the range of $25 to $40
million for the first quarter. Reported diluted earnings per share are
anticipated to be in the range of ($0.05) to $0.10 per share and adjusted
earnings per share are expected to be in the range of $0.05 to $0.20 per share
for the first quarter. The first quarter outlook assumes copper (COMEX) and
aluminum (LME) prices of $2.60 and $0.81, respectively. Foreign currency
exchange rates are assumed constant in the first quarter outlook. The first
quarter outlook for adjusted operating results does not include results from
Asia Pacific and Africa.

Non-GAAP
Financial Measures

Adjusted
operating income (defined as operating income before extraordinary,
nonrecurring or unusual charges and other certain items), adjusted earnings per
share (defined as diluted earnings per share before extraordinary, nonrecurring
or unusual charges and other certain items) and net debt (defined as long-term
debt plus current portion of long-term debt less cash and cash equivalents) are
“non-GAAP financial measures” as defined under the rules of the Securities and
Exchange Commission. Metal adjusted revenues, adjusted operating income and
return on metal-adjusted sales on a segment basis, non-GAAP financial measures,
are also provided herein. See “Segment Information.”

These
Company-defined non-GAAP financial measures exclude from reported results those
items that management believes are not indicative of our ongoing performance
and are being provided herein because management believes they are useful in
analyzing the operating performance of the business and are consistent with how
management reviews our operating results and the underlying business trends.
Use of these non-GAAP measures may be inconsistent with similar measures
presented by other companies and should only be used in conjunction with the
Company’s results reported according to GAAP. Adjusted results, for periods
prior to the fourth quarter of 2015, reflect the removal of the impact of our
Venezuelan operations on a standalone basis. Effective as of the end of the
third quarter 2015, we deconsolidated our Venezuelan subsidiary and began
accounting for our investment in our Venezuelan subsidiary using the cost
method of accounting. Historical segment adjusted operating results are
disclosed in the Fourth Quarter 2016 Investor Presentation available on the
Company’s website.

A reconciliation of GAAP operating
income (loss) and diluted earnings (loss) per share to adjusted operating
income and earnings (loss) per share follows:

Fourth Quarter of 2016 versus
Fourth Quarter of 2015 and Third Quarter of 2016

Fourth
Quarter

Third Quarter

2016

2015

2016

In millions, except per share
amounts

Operating
Income

EPS

Operating
Income

EPS

Operating
Income

EPS

Reported

$

(96.8)

$

(2.10)

$

(37.1)

$

(0.98)

$

4.7

$

(0.29)

Adjustments
to Reconcile Operating Income/EPS

Non-cash
convertible debt interest expense (1)

-

0.01

-

0.01

-

0.01

Mark to
market (gain) loss on derivative instruments (2)

-

(0.08)

-

0.08

-

(0.01)

Restructuring
and divestiture costs (3)

27.8

0.44

15.3

0.23

24.1

0.29

Legal and
investigative costs (4)

(0.7)

(0.01)

7.3

0.11

0.8

0.01

(Gain) loss
on sale of assets (5)

1.0

0.02

-

-

(6.4)

(0.08)

Foreign
Corrupt Practices Act (FCPA) accrual (6)

49.3

0.99

4.0

0.08

-

-

US Pension
Settlement (7)

7.4

0.12

-

-

-

-

Asia Pacific
and Africa (income)/loss (8)

39.3

0.66

38.7

0.52

8.9

0.14

Total Adjustments

124.1

2.15

65.3

1.03

27.4

0.36

Adjusted

$

27.3

$

0.05

$

28.2

$

0.05

$

32.1

$

0.07

The following reconciliation of
estimated operating income and diluted earnings per share to adjusted operating
income and adjusted earnings per share for the first quarter of 2017 contains
forward-looking information. All forward-looking information involves risks and
uncertainties. Actual results may differ materially from those contemplated by
the forward-looking information as a result of factors, risks and uncertainties
over many of which we have no control. See “Cautionary Statement Concerning
Forward-Looking Statements” at the end of this press release.

First Quarter of 2017 Outlook and
First Quarter of 2016 Actual

First Quarter

2017 Outlook

2016 Actual

In millions, except per share
amounts

Operating
Income

EPS

Operating
Income

EPS

Reported

$ 15.0 – 30.0

$ (0.05) – 0.10

$ 20.5

$ (0.10)

Adjustments
to Reconcile Operating Income/EPS

Non-cash
convertible debt interest expense (1)

-

0.01

-

0.01

Mark to
market (gain) loss on derivative instruments (2)

-

-

-

(0.04)

Restructuring
and divestiture costs (3)

8.0

0.07

14.1

0.19

Legal and
investigative costs (4)

-

-

5.8

0.08

Asia Pacific
and Africa (income)/loss (8)

2.0

0.02

1.2

0.05

Total
Adjustments

10.0

0.10

21.1

0.29

Adjusted

$ 25.0 – 40.0

$ 0.05 - $0.20

$ 41.6

$ 0.19

NOTE: The tables above reflect EPS
adjustments based on the Company's full year effective tax rate for 2017 and
2015 of 40% and 2016 of 50%.

(1)

The Company's adjustment for the
non-cash convertible debt interest expense reflects the accretion of the
equity component of the 2029 convertible notes, which is reflected in the
income statement as interest expense.

(2)

Mark to market (gains) and losses
on derivative instruments represents the current period changes in the fair
value of commodity instruments designated as economic hedges. The Company
adjusts for the changes in fair values of these commodity instruments as the
earnings associated with the underlying contracts have not been recorded in
the same period.

(3)

Restructuring and divestiture
costs represent costs associated with the Company's announced restructuring
and divestiture programs. Examples consist of, but are not limited to,
employee separation costs, asset write-downs, accelerated depreciation,
working capital write-downs, equipment relocation, contract terminations,
consulting fees and legal costs incurred as a result of the programs. The
Company adjusts for these charges as management believes these costs will not
continue at the conclusion of both the restructuring and divestiture
programs.

(4)

Legal and investigative costs
represent costs incurred for external legal counsel and forensic accounting
firms in connection with the restatement of our financial statements and the
Foreign Corrupt Practices Act investigation. The Company adjusts for these
charges as management believes these costs will not continue at the
conclusion of these investigations which are considered to be outside the
normal course of business.

(5)

Gain and losses on the sale of
assets are the result of divesting certain General Cable businesses. The
Company adjusts for these gains and losses as management believes the gains
and losses are one-time in nature and will not occur as part of the ongoing
operations.

(6)

Foreign Corrupt Practices Act
(FCPA) accrual is the Company’s additional accruals recorded in 2015 and 2016
to settle the investigation with SEC and DOJ. See “Other Matters” on page 2
of this press release. The Company adjusts for this accrual as management
believes this is a one-time charge and will not occur as part of ongoing
operations.

(7)

The US pension settlement charge
is a one-time cost related to the lump sum payment to term-vested
participants of the US Master Pension Plan. This charge represents the
payments made to those participants who elected to take the lump sum payment
and for which the Company no longer has obligations to pay in the future. The
Company has adjusted for this US pension settlement charge as management does
not expect it to occur in the future, nor is it part of the ongoing
operations.

(8)

The adjustment excludes the impact
of operations in the Asia Pacific and Africa segment which are not considered
"core operations" under the Company's new strategic roadmap. The
Company is in the process of divesting or closing these operations which are
not expected to continue as part of the ongoing business. For accounting
purposes, the continuing operations in Asia Pacific and Africa (which
consists primarily of business located in Africa) do not meet the
requirements to be presented as discontinued operations. Fourth quarter 2016
reflects the non-cash impacts of a $28 million currency translation
reclassification out of accumulated other comprehensive income related to the
closure of our South African Facilities and an $11 million asset impairment
charge for the Company’s business in China; fourth quarter 2015 reflects the
impact of a non-cash asset impairment charge of $31 million in the Company’s
business in Algeria.

Conference
Call and Investor Presentation

General
Cable will discuss fourth quarter results on a conference call that will be
broadcast live at 8:30 a.m., ET, on February 9, 2017. The live webcast of the
Company’s conference call will be available in listen only mode and can be
accessed through the Investor Relations page on our website at www.generalcable.com. Also available on our website is
a copy of an Investor Presentation that will be referenced throughout the
conference call.

General
Cable Corporation (NYSE:BGC) is a global leader in the development, design,
manufacture, marketing and distribution of copper, aluminum and fiber optic
wire and cable products and systems for the energy, industrial, specialty,
construction and communications markets. Visit our website at www.generalcable.com.

Cautionary
Statement Regarding Forward-Looking Statements

Certain statements in this press
release are forward-looking statements that involve risks and uncertainties,
predict or describe future events or trends and that do not relate solely to
historical matters. Forward looking statements include, among others, expressed
expectations with regard to the following: “believe,” “expect,” “may,” “will,”
“anticipate,” “intend,” “estimate,” “project,” “plan,” “assume,” “seek to” or
other similar expressions, although not all forward-looking statements contain
these identifying words. Actual results may differ materially from those
discussed in forward-looking statements as a result of factors, risks and
uncertainties over many of which we have no control. These factors include, but
are not limited to: the economic strength and competitive nature of the
geographic markets that the Company serves; our ability to increase
manufacturing capacity and productivity; our ability to increase our selling
prices during periods of increasing raw material costs; our ability to service,
and meet all requirements under, our debt, and to maintain adequate domestic
and international credit facilities and credit lines; our ability to establish
and maintain internal controls; the impact of unexpected future judgments or
settlements of claims and litigation; the impact of foreign currency exchange
rate fluctuations; the impact of future impairment charges; compliance with
U.S. and foreign laws, including the Foreign Corrupt Practices Act (“FCPA”);
compliance with our obligations under the non-prosecution agreement with the
Department of Justice related to the FCPA settlement; our ability to achieve
the anticipated cost savings, efficiencies and other benefits related to our
restructuring program and other strategic initiatives, including our plan to
exit all of our Asia Pacific and African operations, and the other risks
detailed from time to time in the Company’s filings with the Securities and
Exchange Commission (“SEC”), including but not limited to, its annual report on
Form 10-K filed with the SEC on February 29, 2016, and subsequent SEC filings.
You are cautioned not to place undue reliance on these forward-looking
statements. General Cable does not undertake, and hereby disclaims, any
obligation, unless required to do so by applicable securities laws, to update
any forward-looking statements as a result of new information, future events or
other factors.

General Cable
Corporation and Subsidiaries

Consolidated
Statements of Operations

(in millions,
except per share data)

(unaudited)

Three Fiscal
Months Ended

Twelve Fiscal
Months Ended

December 31,

December 31,

December 31,

December 31,

2016

2015

2016

2015

Net sales

$

910.0

$

952.9

$

3,858.4

$

4,514.5

Cost of sales

835.9

888.0

3,451.3

4,082.1

Gross profit

74.1

64.9

407.1

432.4

Selling,
general and administrative expenses

170.9

101.3

408.9

412.3

Goodwill
impairment charges

-

0.7

9.0

3.9

Intangible asset
impairment charges

-

-

7.5

1.7

Operating
income (loss)

(96.8

)

(37.1

)

(18.3

)

14.5

Other income
(expense)

2.5

(9.4

)

7.2

(71.3

)

Interest
income (expense):

Interest
expense

(22.3

)

(22.8

)

(89.5

)

(97.0

)

Interest
income

1.3

0.5

2.5

2.7

(21.0

)

(22.3

)

(87.0

)

(94.3

)

Income (loss)
before income taxes

(115.3

)

(68.8

)

(98.1

)

(151.1

)

Income tax
(provision) benefit

11.4

13.9

3.7

14.8

Equity in net
earnings of affiliated companies

0.2

0.2

0.9

0.5

Net income
(loss) including noncontrolling interest

(103.7

)

(54.7

)

(93.5

)

(135.8

)

Less: net
income (loss) attributable to noncontrolling interest

0.9

(6.8

)

0.3

(13.9

)

Net income
(loss) attributable to Company common shareholders

$

(104.6

)

$

(47.9

)

$

(93.8

)

$

(121.9

)

Earnings
(loss) per share - Net income (loss) attributable to Company common shareholders
per common share

Earnings
(loss) per common share - basic

$

(2.10

)

$

(0.98

)

$

(1.89

)

$

(2.49

)

Weighted
average common shares - basic

49.7

48.9

49.6

48.9

Earnings
(loss) per common share - assuming dilution

$

(2.10

)

$

(0.98

)

$

(1.89

)

$

(2.49

)

Weighted
average common shares - assuming dilution

49.7

48.9

49.6

48.9

General Cable
Corporation and Subsidiaries

Consolidated
Statements of Operations

Segment Information

(in millions)

(unaudited)

Three Fiscal
Months Ended

Twelve Fiscal
Months Ended

December 31,

December 31,

December 31,

December 31,

2016

2015

2016

2015

Revenues (as reported)

North America

$

476.5

$

479.8

$

2,041.7

$

2,299.3

Europe

212.2

216.5

875.7

960.2

Latin America

174.0

163.5

655.2

726.8

Africa / Asia Pacific

47.3

93.1

285.8

528.2

Total

$

910.0

$

952.9

$

3,858.4

$

4,514.5

Revenues (metal adjusted) (1)

North America

$

476.5

$

496.0

$

2,041.7

$

2,196.9

Europe

212.2

221.6

875.7

927.6

Latin America

174.0

171.7

655.2

672.3

Africa / Asia Pacific

47.3

96.7

285.8

491.3

Total

$

910.0

$

986.0

$

3,858.4

$

4,288.1

Metal Pounds Sold

North America

132.5

120.2

548.0

543.9

Europe

37.7

35.5

154.0

155.0

Latin America

62.5

57.1

239.3

239.3

Africa / Asia Pacific

12.8

24.0

85.1

130.8

Total

245.5

236.8

1,026.4

1,069.0

Operating Income (loss)

North America

$

(39.1

)

$

6.1

$

62.4

$

84.5

Europe

(14.4

)

(1.3

)

2.6

6.6

Latin America

(4.0

)

(3.2

)

(14.4

)

(22.8

)

Africa / Asia Pacific

(39.3

)

(38.7

)

(68.9

)

(53.8

)

Total

$

(96.8

)

$

(37.1

)

$

(18.3

)

$

14.5

Adjusted Operating Income (loss) (2)

North America

$

32.0

$

21.5

$

136.8

$

137.2

Europe

(3.6

)

5.9

21.5

47.8

Latin America

(1.1

)

0.8

(8.3

)

(6.0

)

Total

$

27.3

$

28.2

$

150.0

$

179.0

Return on Metal Adjusted Sales (3)

North America

6.7

%

4.3

%

6.7

%

6.2

%

Europe

-1.7

%

2.7

%

2.5

%

5.2

%

Latin America

-0.6

%

0.5

%

-1.3

%

-0.9

%

Total Company

3.2

%

3.2

%

4.2

%

4.7

%

Capital Expenditures

North America

$

21.1

$

4.1

$

51.3

$

20.9

Europe

6.7

7.0

19.8

20.7

Latin America

2.6

2.1

12.4

11.1

Africa / Asia Pacific

0.2

0.2

0.6

8.8

Total

$

30.6

$

13.4

$

84.1

$

61.5

Depreciation & Amortization

North America

$

9.3

$

10.1

$

41.4

$

40.5

Europe

5.6

5.6

22.6

25.2

Latin America

4.2

4.6

16.9

19.2

Africa / Asia Pacific

0.6

1.3

5.1

11.5

Total

$

19.7

$

21.6

$

86.0

$

96.4

Revenues by Major Product Lines

Electric Utility

$

303.0

$

307.8

$

1,357.1

$

1,550.2

Electrical Infrastructure

228.6

270.0

989.7

1,234.6

Construction

217.1

254.5

820.8

962.9

Communications

113.1

72.5

473.8

517.0

Rod Mill Products

48.2

48.1

217.0

249.8

Total

$

910.0

$

952.9

$

3,858.4

$

4,514.5

(1)

Metal-adjusted
revenues, a non-GAAP financial measure, is provided in order to eliminate an
estimate of metal price volatility from the comparison of revenues from one
period to another.

(2)

Adjusted
operating income (loss) is a non-GAAP financial measure. The company is
providing adjusted operating income (loss) on a segment basis because
management believes it is useful in analyzing the operating performance of
the business and is consistent with how management reviews the underlying
business trends. A reconciliation of segment reported operating income (loss)
to segment adjusted operating income (loss) is provided in the appendix of
the Fourth Quarter 2016 Investor Presentation, located on the Company's
website.

(3)

Return on
metal adjusted sales is calculated on adjusted operating income (loss)

GENERAL CABLE
CORPORATION AND SUBSIDIARIES

Consolidated
Balance Sheets

(in millions,
except share data)

Assets

December 31,2016

December 31,2015

Current
Assets:

(unaudited)

Cash and cash
equivalents

$

101.1

$

112.4

Receivables,
net of allowances of $20.2 million at December 31, 2016 and $23.0 million at
December 31, 2015